Taoiseach Leo Varadkar has described Brexit as the “greatest challenge” to Ireland since independence.

“We’re working tirelessly to get the best possible deal for this country,” he told the Letterkenny Chamber of Commerce during a visit to the north-west of Ireland on Tuesday.

“This means preparing our businesses and our agriculture sector, as well as ensuring the transport sector is ready for whatever happens.

“Ireland’s contingency planning is well advanced. We must plan for all scenarios, including an unlikely one – no deal.”

Mr Varadkar reminded the audience in the border town of measures previously announced, including the preparation of Irish ports and airports to “take account of a changed trading relationship with Britain post-Brexit”.

Ireland’s Budget 2018 saw the announcement of a number of measures, including a 300 million euro Brexit Loan Scheme for businesses and a 25 million euro Brexit Response Loan Scheme for the agri-food sector.

Mr Varadkar said it is the Government’s desire that there will be the “closest possible relationship” between the EU and UK after Brexit.

“If that does not prove possible, the backstop will be in place as part of the withdrawal treaty to ensure no hard border on the island and this will apply unless and until a better solution is found,agreed and implemented,” he said.

“The Government has always been clear that the outcome it is seeking from the EU-UK negotiations must include the protection of the Good Friday Agreement and the avoidance of any hard border on theisland of Ireland.

The Irish Government is seeking to avoid a hard border with Northern Ireland (Brian Lawless/PA)

“Our priority is that work continues on the conclusion of the Withdrawal Agreement, including the Protocol on Ireland and Northern Ireland, which encompasses the backstop for the border.

“At the same time, it is vital to Ireland’s interests that the EU’s Single Market is fully protected. It is crucially important that we maintain a level playing field for our businesses and investment.

“You can be sure that the Government will be deeply engaged and vigilant on all aspects of Brexit in the weeks ahead. We will bring home the best deal possible and we will stand our ground.”

A small number of protesters associated with the Irish Republican Socialist Party (IRSP) held a demonstration against Mr Varadkar in Letterkenny during his address to the chamber.

A spokesman said the protest was over the appointment of Drew Harris as Garda Commissioner and the ongoing housing crisis in Ireland.